2nd buy in as many months. Another $10,000 per acre for a comp. And no I don't believe the sweet spot is so small that it exists only in GPOR's neighborhood. Chesapeak, EVEP, Anadarko, Antero all have had good or very good well results.
February 11, 2013
Gulfport Energy Corporation Announces Proposed Acquisition of Additional Utica Acreage
OKLAHOMA CITY, Feb. 11, 2013 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (Nasdaq:GPOR) today announced its proposed acquisition of additional working interests in the Utica Shale in Eastern Ohio.
Gulfport has entered into a definitive agreement to purchase approximately 22,000 net acres in the Utica Shale in Eastern Ohio from Windsor Ohio LLC, an affiliate of Wexford Capital LP, for approximately $220 million, increasing Gulfport's leasehold interests in the Utica Shale to approximately 137,000 gross (128,000 net) acres. This acquisition excludes Windsor Ohio's interest in 14 existing wells and 16 proposed future wells and certain acreage surrounding these wells. The proposed transaction, which is expected to close prior to the end of February 2013, will increase Gulfport's working interest in the acreage to 93.8%. After giving effect to this acquisition, Gulfport currently estimates that its 2013 net production will be approximately 21,370 to 22,192 barrels of oil equivalent per day. Gulfport will continue to serve as operator of its acreage in the Utica Shale. The transaction was approved by a special committee of Gulfport's Board of Directors. Tudor Pickering Holt & Co acted as advisor to the special committee. In December 2012, Gulfport acquired approximately 37,000 net acres in the Utica Shale from Windsor Ohio LLC.
From Bronte Capital:
I woke up this morning to the news that Gulfport Energy (NASDAQ:GPOR) is buying another 22 thousand net acres in the Utica Shale from Windsor Ohio - an affiliate of Wexford Capital. The price is about $10 thousand an acre. This is funded by a large equity raise.
This is very similar to a transaction in December 2012 where 37 thousand acres were purchased from Windsor Ohio for $372 million. That was also funded by an equity raise. The 8K describing that transaction contained the following disclosure:
Mike Liddell, Gulfport’s Chairman of the Board, is the operating member of Windsor Ohio. All distributions made by Windsor Ohio are first paid to the Wexford members in accordance with their respective ownership interests in Windsor Ohio until they have received amounts equal to their respective capital contributions. Thereafter, distributions are made 90% to the Wexford members in accordance with their respective ownership interests and 10% to Mr. Liddell. Upon closing of the Acquisition, Mr. Liddell received approximately $2.9 million in distributions from Windsor Ohio corresponding to his 10% interest described above.
It is an open question as to how much money from this equity raise will find its way into Mr Liddell's pocket. The Gulfport Energy press releases do not broach this question.
However - on a cursory look - it appears that the Windsor Ohio members have already received back their capital contributions and on a literal reading of the above quoted 8K a full ten percent of the money paid for this acreage will flow personally to the Chairman of Gulfport Energy.
$22,000,000 is not a bad pay day. I know it is a guess - but hey - Gulfport do not disclose this detail in their press release. Nor is it disclosed in their prospectus for the offering. I telephoned Paul K. Heerwagen IV (the IR officer and contact on the press releases) and asked him the question directly. He hung up on me and did not answer return calls.
But dear Gulfport shareholders - you should have no discomfort: the press release assures us that "the transaction was approved by a special committee of Gulfport’s Board of Directors."
Like I said, the E&P Hedgies always win.... One thing I will say as an emotionless trader/investor. Gulfport is sitting right next to XTO and chummy to boot , at any given time in Ohio, they make the call and pull the trigger on a JV and the stock goes to 50, good post and I agree with you, seems to be some disclosure issues that never get addressed, that whole area is waiting for the Enervest deaL for the valuable HBP, sure will be interesting to see if a new major makes the move to throw their hat in the ring, Guernsey and Tusc, maybe Muskingum.... tick tock...tick tock... I'm anxiously waiting
Proven acreage bro, hedge fund guys always win, nice investment, they paid 2000 for it 18 months ago and sold it for 10, not a bad return.... I believe that would be a 5 bagger, I hope this is the last dilution for a while, they will sell (JV) half for 15K an acre, nice opp to add more shares. GPOR is a 50 dollar stock this summer.
Hate to bring this up but you are about to go through key support, sorry, glad I sold.